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Article
Publication date: 26 July 2021

Anthony Amoah, Rexford Kweku Asiama and Kofi Korle

This paper acknowledges the rising levels of non-performing loans (NPLs) and the consequences associated with such patterns to an emerging economy like Ghana. In theory…

Abstract

Purpose

This paper acknowledges the rising levels of non-performing loans (NPLs) and the consequences associated with such patterns to an emerging economy like Ghana. In theory, one would expect rising NPLs to have a negative impact on an economy, especially regarding credit creation and private sector growth. This research, consistent with empirical literature, constructs a measure of financial market development to investigate its effect on Ghana's NPLs.

Design/methodology/approach

The fully modified ordinary least squares (FMOLS) econometric technique is used as a way of addressing common time series identification issues such as endogeneity and serial correlation.

Findings

The study finds that the growth of the financial market has a negative and statistically significant relationship with NPLs in Ghana. Therefore, building a stable financial sector is key to addressing Ghana’s rising rates of NPLs.

Practical implications

Applying the breaks to Ghana's NPLs would involve deepening credit and improving efficiency through good governance. The study suggests that such a mechanism would increase financial sector performance and reduce the growth risks arising from the industry.

Originality/value

The study analyzes the influence of financial market development on the quarterly growth of NPLs in Ghana. Most studies only focus on annual growth of NPLs.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

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Article
Publication date: 25 August 2020

Anthony Amoah, Kofi Korle and Rexford Kweku Asiama

This paper seeks to examine the motivating factors that propel people to use mobile money in the Greater Accra Region (GAR) of Ghana. The authors posit that the behaviour…

Abstract

Purpose

This paper seeks to examine the motivating factors that propel people to use mobile money in the Greater Accra Region (GAR) of Ghana. The authors posit that the behaviour of a person, in terms of the choice and means of transaction, cannot be explained solely by utility-maximizing assumptions or rationality. Thus, other socio-cultural and psychological factors are crucial in determining whether a person will use mobile money.

Design/methodology/approach

This study uses a cross-sectional design to obtain primary data on 733 households from the GAR of Ghana to determine the drivers of mobile money use. Given the binary nature of the dependent variable, a logit model and its marginal effects are estimated. Furthermore, parametric and non-parametric statistical tests are used to examine gender effect and mobile money use.

Findings

The study finds that technology savvy cohorts (youthful age cohorts), available services such as phone credit recharge, education and income are among the key determinants of mobile money use in Ghana. Furthermore, parametric and non-parametric tests of mobile money use on gender show a statistically significant difference in gender use of mobile money, albeit, marginal. The findings imply that consistent use of mobile money to access social and economic services can go a long way in promoting financial inclusion, financial empowerment and general wellbeing of people.

Originality/value

Households in developing countries especially Ghana have rapidly embraced mobile money technology. However, what determines the household level of adoption, to the best of our knowledge, is unknown and yet to be tested. This study bridges that gap in the empirical literature as well as contributes to policy decisions.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2020-0271

Details

International Journal of Social Economics, vol. 47 no. 10
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 12 December 2018

Rexford Kweku Asiama and Anthony Amoah

The sharp rise in non-performing loans (NPLs) with its associated effect on financial institutions in Ghana has become very alarming. This has led to the collapse of…

Abstract

Purpose

The sharp rise in non-performing loans (NPLs) with its associated effect on financial institutions in Ghana has become very alarming. This has led to the collapse of distressed institutions and associated repercussions such as loss of private savings, investments, businesses and livelihoods. The purpose of this paper is to test the hypothesis that the monetary policy rate can be used to influence NPLs in Ghana.

Design/methodology/approach

Using quarterly data spanning from 2000 to 2016, the authors used the autoregressive distributed lag econometric approach to estimate the effect of monetary policy on the percentage growth of NPLs in Ghana. The results are presented for both short-run and long-run periods.

Findings

In the short run, the authors find evidence of no statistically significant effect of monetary policy on the percentage growth of NPLs. However, in the long run, the authors find a statistically significant effect of monetary policy on the percentage growth of NPLs.

Practical implications

The authors recommend that policymakers should focus on building a strong financial environment, so that monetary policy can be used to influence the commercial bank’s interest rate. In effect, this will help reduce the growth of NPLs, reduce risk and attract competitors into the financial market, increase asset base, increase credit to support viable ventures and subsequently boost economic growth in Ghana.

Originality/value

The paper shows its value by using quarterly data whereas most literature have considered annual data. Also, the paper includes a policy variable measured by the Monetary Policy Rate (MPR) as the key variable of interest which is normally not the case with most studies.

Details

African Journal of Economic and Management Studies, vol. 10 no. 2
Type: Research Article
ISSN: 2040-0705

Keywords

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